Andre Hackett runs a mobile studio which he started up to challenge gang culture in his community. Photograph: Frank Baron for the Guardian

When 23-year-old Andre Hackett took his friend's recording equipment to a south London estate four years ago he had no idea it would turn into a successful business.

"I lost friends to gang culture and a few members of my family had gone to prison," he recalls. "My friend and I thought we could use music to address the issues, so we took the recording equipment he had in his bedroom to a local estate to give them something positive to do."

This summer has seen a barrage of bad news for the nation's young people. Unemployment has risen sharply, college places have been cut and tuition fees threaten to deter a generation of students from less affluent backgrounds from going to university. To top it all off, last month's riots have made an already disillusioned sector of society feel even more isolated.

The latest government figures show that of 2.5 million unemployed people, just under a million are 16-24. With a limited jobs market, many are wondering where else they can turn. A number of schemes are encouraging young people to see self-employment as an alternative option.

According to recent research supporting the AXA Ambition Awards, more than three-quarters of 11- to 18-year-olds say they would like to start their own business. Hackett believes that anyone can do it with the right focus. "There is nothing special about me, except the way I think," he says. "I say, 'step out and do something you are passionate about.' When I speak to young people they feel empowered by seeing someone from our community doing it.

"Starting a business is not about how clever or rich you are, but about the practical skills and determination to do it," says Catherine Marchant, director of Young Enterprise, a nationwide scheme that encourages hands-on business experience. "Young people need to be shown they have the skills and talent to turn their lives into something positive."

One woman trying to address this in her community is Adwoa Agyemang, 29, who started her own business two years ago and now runs a Young Entrepreneurs Programme in Harrow, north-west London to show others how to get started. She believes that this grassroots approach is the key to introducing business to those who think it is out of their reach.

"We understand the need in communities, can relate to them and know how best to communicate. We talk about other issues like what's happening at home and work on their personal development."

Agyemang thinks the jobs market is making a permanent shift and that in future people who can offer their own services will be in the strongest position. The traditional workplace, she argues, is evolving and there is already a trend towards more work being outsourced. "In the changing environment traditional long-term employment can't be relied on," Agyemang says. "The only way to be secure is to have the skills and knowledge to create security for yourself. Entrepreneurism is the way to do this."

Research by the London School of Economics and Avon earlier this year revealed the entrepreneurial ambitions of young women, in particular, predicting a doubling of the number of self-employed females over the next 30 years. However, less than a third think there is enough advice and support from the government to help them get started.

Funmilaya Aiyenuro, 21, attended the Young Entrepreneurs Progamme this summer and says it has given her the boost she needed. She recently graduated from the University of Manchester with a degree in pharmacology and physiology and is working part-time as a play worker at the same time as running her natural cosmetics company, Layaloves.

"I always wanted to start my own business because of that feeling of having something that is yours and that you can be proud of," she says.

"I thought it was impossible, though. In order to try, you need encouragement and this programme kept me motivated and helped me go from having an idea to doing something about it."

Aiyenuro is from the London borough of Camden, one of the areas affected by last month's riots, and says the most inspiring element of the course was having local entrepreneurs talk openly about their experiences.

"People feel isolated and like no one is taking an interest in their lives. Celeb culture is part of the problem as people think lavish lifestyles are the only way to be happy. What we need is more interaction with community role models who have come from where we are and had success."

Experts agree there is a need for more visible community role models among young people who want to see people from their own streets and neighbourhoods being successful, rather than celebrities or government figures telling them what they can achieve or how they should be living their lives. Martina Milburn, chief executive of The Prince's Trust, heard this kind of feedback first-hand when she visited the aftermath of the riots with the Prince of Wales and the Duchess of Cornwall. She says that many young people felt disillusioned and unsure of where to turn for help.

"I saw an absence of hope," Milburn says. "Young people saying, 'we want to have a stake in our communities but no one is showing us how to do it'."

The Prince's Trust, which supports young people from disadvantaged backgrounds to access work, education or training, has committed £2.5m to increasing programmes in riot-hit areas in Birmingham and London.

This investment may not turn things around overnight, but offers opportunities for young people to find a new direction. "You can't walk in and change their minds, attitude and future in two days," Milburn admits. "They need lots of support and encouragement. There is no quick fix. There needs to be a greater recognition that young people need more investment and, in return, you cut health bills, prison bills and the social bill.

"We say to them, 'we can help you make a difference to your life and for future generations'."

Many young people are desperate to turn their lives around but find that they are excluded from formal employment because of their background – a lack of qualifications or a criminal record. They find themselves in a deep hole where all options appear to be closed.

Arnold Sebutinde, 27, from Aston, Birmingham, was in this position after spending two years in prison for conspiracy to steal. "At one stage I felt there was nothing else there for me," he says. "I couldn't see myself coming out and finding a job, with a criminal record and in the economic climate. It was make or break."

Luckily for Sebutinde, the former proved true. He developed his skills as an artist and when he came out of prison he got involved in the Prince's Trust Young Enterprise Programme. He was given a start-up loan and a mentor and now his business, Spontaneous Portraits, is going from strength to strength. He feels positive about his future. "It has provided me with a sense of pride and responsibility," he says. "It's given me a purpose in life and is helping me reach my full potential. It's hard, but nothing worthwhile in life is reached without a struggle.

"Many youth lack the direction and motivation to strive for a better life but there is another option, there is another way. Don't give up."

Starting a business gives young people like Sebutinde the chance to make the most of their skills, when traditional routes are blocked. The increased profile of successful entrepreneurs on programmes like The Apprentice and Dragons' Den has made starting a business seem glamorous and the route to big bucks. But the truth is, it's hard work.

One in three businesses fail in the first three years and it takes long hours and a lot of determination to make it work. For most business owners, though, there is no going back. Hackett admits that running his mobile recording studio is not always easy but says he would never change it.

"The reality is late nights, not a lot of weekends and, at times, having no money. But I couldn't work for anyone else now. I get up every morning and I am happy. Everything is in my own hands; however well or badly I do is down to me."

Five key steps to start

•Do something you are passionate about. What are you good at? What problem have you seen that needs solving? Look at your skills and experience to find your business idea. You are going to be spending a lot of time and effort on this idea, so be passionate about it.

•Research the market. You may love your idea, but does anyone want to buy it? It is essential to do your research to find out if there is a market for your product or service and understand your competitors.

•Write a business plan. A business plan helps you to focus your idea, foresee any pitfalls and will be essential if you want to seek funding. You can download some templates from businesslink.gov.uk.

•Sort out the finances. Many businesses can be started on a small budget by using savings or loans from friends and family. Programmes like The Prince's Trust also offer funding. You will need to handle your own tax and national insurance so visit HM Revenue & Customs to register as self-employed.

•Build a support system. Some of the most successful entrepreneurs credit their mentors for getting them there. Seek advice from friends and family, look for a mentor in your field, or join a local business network for support. UK Business Forums is a good place to meet other business start-ups online.